Quick answer

Yes. You may buy a condominium unit that the current buyer has not fully paid, commonly called a pasalo, assignment, or transfer of rights. But you are usually buying the current buyer’s contractual rights—not yet the condominium title.

The safe structure is normally a developer-approved assignment and assumption of the existing Contract to Sell. If a bank or other lender finances the unit, its written approval may also be required. Do not rely on a private agreement with the original buyer alone. Without the creditor’s consent, the original buyer may remain liable, you may not be recognized as the substitute buyer, and payments made through the original buyer may not protect your right to the unit.

Before paying, obtain written confirmation from the developer or lender that:

The contract is active and transferable.
The seller is the recognized buyer.
The account is not cancelled or subject to an unresolved default notice.
The exact outstanding balance, arrears, penalties, transfer fees, and future payment schedule are disclosed.
The unit, parking slot, and inclusions match the documents.
The assignment will release the original buyer and formally recognize you as the new buyer.
The project has the required government approvals and License to Sell.
No conflicting sale, assignment, mortgage, lien, or condominium-dues problem affects the transaction.

If the developer or lender will not approve the transfer in writing, do not treat the deal as completed.

What “not fully paid” can mean

The correct process depends on the unit’s legal and financial status.

The unit is still under a Contract to Sell with the developer

This is the usual preselling or installment situation. The developer generally retains ownership until the price and other agreed charges are fully paid. The current buyer holds contractual rights to acquire the unit upon compliance with the contract.

Your transaction normally requires an assignment of those rights and an assumption of the remaining obligations, subject to the Contract to Sell and the developer’s transfer rules.

The unit has bank financing

The title may already exist, but the bank may hold the owner’s duplicate title or have a registered mortgage. A buyer cannot safely “take over” a housing loan merely by paying the borrower’s monthly amortizations.

Substituting a new debtor requires the creditor’s consent under Article 1293 of the Civil Code. The bank may require a new credit evaluation, refinancing, loan assumption, or full settlement of the existing loan. Until the bank approves the substitution, the original borrower ordinarily remains responsible for the loan.

The unit is fully paid but the title has not yet been transferred

This is not the same as an unpaid installment purchase. Upon full payment, the buyer may demand the notarized Deed of Absolute Sale and the documents needed to register the transfer. Section 25 of Presidential Decree No. 957 requires the developer to deliver the title upon full payment, subject to registration requirements.

A resale is being offered with seller financing

If a titled owner sells the unit to you on installments, the agreement may be a contract of sale, conditional sale, or contract to sell depending on its actual terms. The label alone is not controlling. Ownership, cancellation rights, taxes, and remedies can differ substantially, so the document should be reviewed before signing.

Why a private pasalo agreement is risky

A notarized agreement between you and the current buyer does not automatically make you the developer’s or bank’s recognized buyer.

Under Article 1293 of the Civil Code, a debtor cannot be replaced without the creditor’s consent. The Supreme Court has repeatedly applied this rule to attempted assumptions of debt. Consent can sometimes be inferred from conduct, but contracts may require a particular form, such as prior written approval. For a condominium transfer, relying on implied consent is needlessly dangerous.

Without formal approval:

The developer may continue issuing notices only to the original buyer.
Your payments may be credited to the original buyer’s account without transferring the contractual rights to you.
The original buyer may remain able to request documents, negotiate, or attempt another transfer.
Default or cancellation may occur without notice reaching you.
The bank may reject the loan takeover and enforce the mortgage against the registered borrower and property.
You may be left with only a claim against the person who received your money.

The preferred document is usually a tripartite deed or developer-prescribed transfer instrument signed or formally approved by the original buyer, the incoming buyer, and the developer. If financing is involved, the lender’s requirements must also be satisfied.

Due diligence before paying any reservation or transfer amount

Verify the seller’s rights and identity

Ask for and independently verify:

Government-issued identification and civil status.
The original reservation agreement, Contract to Sell, amendments, and payment schedule.
Official receipts and the developer’s current statement of account.
Default, demand, cancellation, restructuring, or reinstatement notices.
Documents covering any parking slot, storage area, or other separately sold property.
The seller’s authority if an attorney-in-fact, estate representative, corporation, or married person is involved.
Any prior assignment, pledge, loan security, or agreement affecting the buyer’s rights.

If the buyer is married, determine whether spousal participation or consent is required. If the named buyer has died, do not proceed merely on the signature of one heir; succession, estate-tax, and authority issues must first be resolved.

Confirm the account directly with the developer or lender

With the seller’s written authorization, obtain a certification or written statement showing:

Total contract price.
Amount actually credited.
Remaining principal balance.
Overdue installments.
Interest, penalties, taxes, association dues, and other charges.
Whether the contract remains valid.
Whether a cancellation notice has been issued or received.
Transfer or assignment requirements and fees.
Turnover and completion status.
Any financing deadline or balloon payment.
Whether the seller has received discounts, rebates, refunds, or incentives that affect the balance.

Do not calculate the equity solely from the seller’s receipts. The developer’s ledger controls what it has recognized.

Check the project and unit

For a developer sale, verify the project’s Certificate of Registration and License to Sell with the appropriate Department of Human Settlements and Urban Development regional office. DHSUD advises buyers to ask for these documents and validate them with the issuing office.

Review the approved plans and the exact unit description. Confirm the tower, floor, unit number, floor area, parking designation, permitted use, completion date, and promised amenities. A License to Sell is important, but it is not a guarantee that every contractual promise has been performed.

If an individual Condominium Certificate of Title already exists, obtain a recent certified true copy from the Register of Deeds or through an official Land Registration Authority service. Check:

The registered owner.
The unit and project description.
Mortgages, liens, adverse claims, notices, and other annotations.
Whether the parking slot has a separate title.
Whether the title details match the contract and physical unit.

Also inspect the Master Deed, declaration of restrictions, condominium corporation’s rules, and available records of dues or assessments.

Inspect the property and building

For a completed unit, inspect the actual premises. Document defects, unauthorized alterations, water intrusion, utilities, appliances, occupancy, and included fixtures. Confirm whether the unit is leased and whether any occupant must vacate.

Ask the condominium corporation or property manager for a written statement regarding:

Unpaid regular dues.
Special assessments.
Utility charges.
Rule violations.
Renovation obligations.
Move-in, transfer, and documentation requirements.
Pending disputes materially affecting the unit.

The treatment of old dues can depend on the governing documents, agreements, and nature of the charge. Allocate responsibility expressly rather than assuming the buyer or seller automatically bears every item.

A safer transaction structure

1. Obtain the developer’s or lender’s written transfer procedure

Request the official checklist before signing or paying the seller. Confirm whether the contract prohibits assignment, requires prior consent, imposes a transfer fee, or requires the account to be current.

2. Agree on the financial breakdown

Separate the amounts clearly:

Payment to the seller for recognized equity or contractual rights.
Amount payable directly to the developer or lender.
Arrears and penalties.
Transfer or processing fees.
Taxes and registration expenses.
Condominium dues and assessments.
Amount held back until approval and document delivery.

The seller’s claimed “equity” should not be accepted without reconciling it against the developer’s certified account.

3. Make approval a condition before final release

A written offer or preliminary agreement should state that the transaction is conditional on the developer’s and, when applicable, lender’s approval. It should also provide for the return of money if approval is denied for reasons not caused by the incoming buyer.

Avoid paying the entire seller’s price merely upon signing a private deed. Use staged payments, escrow, or another documented arrangement tied to objective milestones.

4. Sign the required assignment and assumption documents

The instrument should identify:

The parties and their authority.
The original Contract to Sell.
The exact unit, parking slot, and inclusions.
Amounts already paid and still due.
The effective date of the transfer.
The obligations assumed by the incoming buyer.
The seller’s warranties against prior transfers and undisclosed claims.
Who bears arrears, fees, taxes, dues, and assessments.
The consequences if approval, financing, or registration fails.
Delivery of originals, receipts, keys, and possession.
Refund, indemnity, and dispute provisions.

Use the form required by the developer or bank. Notarization helps authenticate the document but does not replace required creditor approval.

5. Pay through traceable channels

Pay the outstanding account directly to the developer or lender whenever the approved arrangement permits. Obtain official receipts bearing the correct account and unit details.

For money payable to the seller, use a traceable bank transfer, manager’s check, or escrow arrangement. The receipt should identify what the payment covers and the condition authorizing its release.

6. Secure written recognition of the new buyer

Obtain a developer-issued confirmation, amended contract, approved deed of assignment, new Contract to Sell, or equivalent document showing that you are the recognized buyer. If the original buyer is to be released, the document should say so clearly.

Possession of keys or payment receipts under another person’s name is not an adequate substitute.

7. Complete the final conveyance after full payment

Upon full payment, require the notarized Deed of Absolute Sale and the documents needed for tax processing and registration. The Supreme Court has held that a fully paid condominium buyer is entitled to the notarized deed and owner’s duplicate Condominium Certificate of Title needed to register the transfer.

Confirm the current documentary requirements with the relevant BIR Revenue District Office, local treasurer or assessor, and Register of Deeds. Requirements and tax treatment depend on whether the transaction is an assignment of contractual rights, a developer sale, a resale of titled property, or a transfer involving a business asset.

Maceda Law rights if installment payments are in default

Republic Act No. 6552, known as the Realty Installment Buyer Act or Maceda Law, covers installment transactions involving residential condominium apartments, subject to its statutory exclusions. It regulates what a seller must do when the buyer defaults. It does not make every voluntary withdrawal or negotiated assignment refundable on demand.

If at least two years of installments have been paid

The defaulting buyer is entitled to:

A grace period of one month for every year of installment payments made, without additional interest on the unpaid installments. This right may be exercised only once every five years during the life of the contract and its extensions.
If the contract is cancelled, a cash surrender value equal to 50% of total payments made.
After five years of installments, an additional 5% of total payments for every year beyond five years, up to a maximum cash surrender value of 90%.

Down payments, deposits, or options on the contract are included in computing the total installment payments made.

Cancellation becomes effective only after both requirements are met:

Thirty days have passed from the buyer’s receipt of the seller’s notice of cancellation or demand for rescission by notarial act; and
The seller has paid the required cash surrender value.

A contract clause contrary to the law’s protections is void.

If less than two years of installments have been paid

The seller must give a grace period of at least 60 days from the date the installment became due.

If the buyer still does not pay, the seller may cancel the contract only after 30 days from the buyer’s receipt of a notice of cancellation or demand for rescission made by notarial act.

The statutory cash-surrender-value requirement for buyers who have paid at least two years does not apply in the same way to this category. Any additional refund right may arise from the contract, another applicable law, or the facts of the developer’s breach.

Right to assign or reinstate

Before actual cancellation, the buyer may sell or assign the buyer’s rights to another person by notarial act. The buyer may also reinstate the contract by updating the account during the applicable grace period and before actual cancellation.

This statutory right does not mean that a private assignment automatically substitutes the incoming buyer for all obligations without following the contract and obtaining necessary creditor recognition. Coordinate the assignment with the developer and lender.

When the developer, not the buyer, is in breach

Do not confuse buyer default with a developer’s failure to develop or complete the project according to the approved plans and agreed period.

Under Section 23 of Presidential Decree No. 957, a buyer may stop paying installments when the owner or developer fails to develop the project according to the approved plans and within the required time, after due notice to the developer. The buyer may instead seek reimbursement of the total amount paid, including amortization interest but excluding delinquency interest, with legal interest.

Section 24 provides that payments may not be forfeited when the buyer desists because of the developer’s failure to develop the project according to the approved plans and within the prescribed period.

These remedies are fact-sensitive. A buyer should not simply stop paying based on rumor, dissatisfaction, or a minor issue. Preserve the approved completion commitments, notices, construction evidence, payment records, and proof that the developer received the buyer’s written notice. Seek legal advice before withholding payment because an unjustified stoppage can expose the account to default and cancellation.

Mortgages and title risks

Presidential Decree No. 957 regulates a developer’s mortgage of a condominium project or unit. Where the mortgage was properly constituted, the buyer may be entitled to pay installments directly to the mortgagee for application to the corresponding mortgage debt. The decree also contemplates release of the mortgage on the particular unit upon full payment.

Still, never assume that full payment to the seller will remove a mortgage. Obtain written payoff and release instructions from the mortgagee. Require proof that the mortgage affecting the unit will be discharged and that the documents needed for cancellation of the annotation will be delivered.

If the title carries an adverse claim, levy, notice of lis pendens, estate issue, or an unfamiliar annotation, obtain a Philippine property lawyer’s written assessment before paying.

Foreign buyers

A foreign national may generally acquire a condominium unit if the project’s ownership structure complies with constitutional and statutory land-ownership restrictions. Under the Condominium Act, transfer is prohibited when it would cause the foreign interest in a condominium corporation that owns the land to exceed the legally permitted level.

The commonly cited limit is 40% foreign ownership where the condominium corporation holds the land, but compliance must be checked against the project’s current ownership records and legal structure. Foreign buyers should obtain written confirmation from the condominium corporation or corporate secretary before committing funds.

This exception does not permit a foreign buyer to acquire Philippine land directly through a disguised arrangement or nominee.

Taxes, fees, and registration

Do not assume that calling the transaction a “transfer of rights” makes it tax-free. An assignment may have tax consequences based on the consideration, nature of the right transferred, seller’s status, and whether the unit is a capital or ordinary asset.

For a conventional sale of Philippine real property classified as a capital asset, BIR rules generally impose capital gains tax based on the higher applicable tax base, while documentary stamp tax and other charges may also apply. Developer and business-property transactions can instead involve value-added tax, creditable withholding tax, or other treatment.

Before signing, obtain transaction-specific advice or a written computation covering:

Taxes on the assignment or resale.
Documentary stamp tax.
Applicable withholding obligations.
BIR electronic Certificate Authorizing Registration requirements.
Local transfer tax.
Registration fees.
Developer or bank transfer fees.
Notarial and professional fees.
Condominium clearance charges.

State in the contract who is legally responsible for each item and who will initially advance it. Private allocation between the parties does not necessarily change their obligations to the government.

Evidence to preserve

Keep both paper and backed-up electronic copies of:

Advertisements, listings, and representations about the unit.
Reservation agreement and Contract to Sell.
Approved assignment or assumption documents.
Developer and lender approvals.
Statements of account and payoff computations.
Official receipts and bank transaction records.
Default, cancellation, turnover, and demand notices.
License to Sell and project registration details.
Certified true copies of titles.
Master Deed and declaration of restrictions.
Condominium corporation clearances and dues statements.
Inspection reports, photographs, videos, and defect lists.
Emails, messages, and meeting notes.
Tax returns, payment confirmations, BIR clearances, and registration receipts.
Signed inventories, key turnover records, and possession documents.

Record when and how formal notices were delivered. Deadlines under the Maceda Law and other remedies may depend on the due date, receipt of a notarized notice, or actual cancellation.

Common mistakes to avoid

Paying the seller before the developer or bank confirms transferability.
Assuming that notarization alone binds the developer or lender.
Paying monthly amortizations under the seller’s name indefinitely.
Accepting screenshots instead of official account statements and receipts.
Failing to check whether cancellation has already become effective.
Treating possession as proof of ownership.
Ignoring a mortgage, adverse claim, or separate parking title.
Calculating equity without including arrears, penalties, fees, or a balloon balance.
Signing a deed that does not address rejection of the transfer.
Paying cash without a detailed receipt.
Assuming all prior payments are refundable under the Maceda Law.
Stopping payments over a developer dispute without proper notice and legal advice.
Using the seller’s broad power of attorney as a substitute for an approved assignment.
Underdeclaring the price or using side agreements to reduce taxes.
Failing to examine restrictions on leasing, short-term rentals, renovations, or permitted use.

When legal help is urgent

Consult a Philippine property lawyer promptly if:

A notarized cancellation or rescission notice has been received.
The account is already delinquent or the developer claims it was cancelled.
The seller demands full payment before developer or bank approval.
The seller cannot produce the original contract or official receipts.
The developer’s account balance differs materially from the seller’s figures.
Two people claim rights to the same unit.
A title shows a mortgage, levy, adverse claim, or pending case.
The registered owner or original buyer has died.
A spouse, heir, corporation, or attorney-in-fact is involved.
The project lacks a verifiable License to Sell.
Turnover is substantially delayed or construction appears abandoned.
The buyer intends to suspend installments under Presidential Decree No. 957.
A foreign-ownership limit may be close to being exceeded.
A bank-financed transfer is being presented as an informal loan takeover.
A large non-refundable payment or irrevocable document must be signed immediately.

For regulatory concerns, contact the appropriate DHSUD regional office. Disputes involving real-estate development and claims by condominium buyers against developers may fall within the adjudicatory jurisdiction of the Human Settlements Adjudication Commission. Court or other agency jurisdiction can depend on the parties and relief sought.

Frequently asked questions

Can I simply continue the seller’s monthly payments?

You can physically make payments, but that does not necessarily transfer the seller’s rights or release the seller from liability. Obtain a formal, approved assignment or loan assumption first.

Is a notarized Deed of Assignment enough?

Not always. It proves that the parties executed the document, but it does not replace a developer’s or lender’s consent where the contract or law requires that consent.

Do I immediately become the condominium owner?

Usually not when the unit remains under a Contract to Sell. Ownership is commonly retained by the developer until full payment and execution of the final deed. Confirm the actual contract and title status.

Can the original buyer assign the contract after default?

The Maceda Law allows assignment by notarial act before actual cancellation. The incoming buyer should first verify the arrears, grace period, notices, and developer requirements. Assignment does not erase the default.

Is the seller entitled to a 50% refund?

Only when the statutory conditions apply, including payment of at least two years of installments and cancellation governed by the Maceda Law. The percentage is computed from total payments as provided by law, not merely from the seller’s claimed equity. A voluntary transfer to another buyer is different from a statutory refund upon cancellation.

What if fewer than two years have been paid?

The Maceda Law generally requires a grace period of at least 60 days from the missed installment’s due date. If nonpayment continues, cancellation requires a further 30 days after receipt of a notarized notice of cancellation or demand for rescission. The statutory 50% cash surrender value does not apply on the same basis.

What if the project is delayed?

Check the completion date in the License to Sell, approved plans, contract, and official amendments. Remedies under Presidential Decree No. 957 may be available for failure to develop according to the approved plans and required period, but the right to suspend payment or demand reimbursement should be exercised with proper notice and evidence.

Who should receive my payments?

Pay the developer or lender directly when the approved arrangement permits. Release the seller’s equity through a documented, conditional payment mechanism tied to approval and delivery of the required documents.

Can a foreigner buy the unit through a pasalo?

Potentially, but the transfer must comply with foreign-ownership restrictions and the condominium project’s structure. Obtain written confirmation that the transfer will not breach the permitted foreign-ownership level.

Where can I verify the title?

Request a current certified true copy from the Register of Deeds or through an official Land Registration Authority service. Do not rely solely on a photocopy supplied by the seller.

Official sources

This article provides general legal information, not advice for a particular transaction. Condominium contracts, title annotations, loan terms, tax classification, and notices can change the legal result. Have the complete documents reviewed by a qualified Philippine lawyer and confirm current agency requirements before paying or signing. Sources and procedures checked as of September 7, 2026.